Good morning!
Grain futures prices mixed overnight… As of 6:00 a.m. CST, July corn was up 3 3/4 cents. July soybeans were up 5 1/2 cents. July soybean meal was down $1.20 and July bean oil was 63 points up. July SRW wheat was down 4 cents and July HRW was 4 1/2 cents lower. The key outside markets see Nymex WTI crude oil prices higher and trading around $93.00 a barrel. The U.S. dollar index is a bit firmer. The yield on the benchmark 10-year U.S. Treasury note is presently 4.25 percent.
Latest on the war in the Middle East…
--Trump hints truce deal with Iran might be close
--Strait of Hormuz remains virtually closed
--China’s Xi vows closer coordination with Russia as Iran war drags on
--U.S. stocks hold near all-time highs on peace hopes
--Israel hails Lebanon talks despite slim odds of breakthrough
President Trump played down the prospect of renewed fighting in the war with Iran, even as questions remain over Tehran’s nuclear program and access to the Strait of Hormuz. Speaking to ABC News on Tuesday and as reported by Bloomberg, Trump said extending a ceasefire that expires next week may not be necessary, hinting at near-term progress toward a deal to end the near seven-week conflict. In a Fox Business interview, he said the war is “close to over.” An initial round of peace talks between the two sides ended in Pakistan on Sunday without a deal. A second meeting hasn’t been agreed, though work has been ongoing this week to secure a new time and place, according to people familiar with the matter, who asked not to be identified discussing private deliberations, said Bloomberg. Talks might restart “over the next two days,” Trump told the New York Post, which would mean by Thursday.
Rain and strong thunderstorms across the Plains, Midwest… The National Weather Service today said a strong ridge of high pressure will produce strong to severe thunderstorms today and into tonight across the central and southern Plains. Frequent lightning, damaging wind gusts, hail, and a few tornadoes are possible. Over the Pacific Northwest, the arrival of a cold front early this morning is signaling the beginning of a cold snap that will sweep through a good portion of western U.S. reaching into the Northern Plains by Friday morning. Temperatures will be drastically colder behind this potent front along with a good dose of mountain snow and windy conditions. Rain is expected to change over to snow across the northern Plains behind the cold front early on Friday as a low-pressure system develops over the central High Plains. Widespread record-high temperatures are forecast this afternoon across the east-central U.S. The heat is forecast to continue into Thursday before a slight moderation in temperatures arrives on Friday.
Farm Bureau survey: “real impact of fertilizer availability and price”… A survey by Farm Bureau shows fertilizer pre-booking rates varied significantly by region, with just 19% of Southern producers reporting fertilizer purchases secured ahead of the season, compared to 30% in the Northeast, 31% in the West and 67% in the Midwest, reflecting differences in planting decision timelines and exposure to recent price increases. “Fertilizer affordability challenges are most acute in the South and Northeast but remain a concern for farmers across all regions. Around 70% of respondents report being unable to afford all the fertilizer they need. Farm diesel prices have increased 46% since the end of February, raising costs for fieldwork, fertilizer transport and irrigation during both planting and growing seasons. Nearly six in 10 farmers report worsening finances, reflecting rising fertilizer and fuel costs during spring planting and underscoring the urgent need for immediate economic assistance to keep farms gates open. “Rising input costs tied to the conflict in the Middle East are adding strain to an already challenging farm economy,” said the survey. More than 5,700 farmers responded to the survey, which was conducted April 3 through April 11.
Retail U.S. gasoline, diesel prices at highest seasonal levels ever… While fuel costs have eased slightly in recent days as oil markets have backed off amid the possibility of a U.S.-Iran deal to end the war, retail prices are still elevated — especially for this time of year. Gasoline averaged $4.12 a gallon on Monday, according to the American Automobile Association and as reported by Bloomberg. That’s a record for the date and compares with the previous high of $4.07 on the same day in 2022, following the price spike driven by Russia’s invasion of Ukraine. Meanwhile, national average diesel prices sat at $5.65 a gallon, more than 60 cents above their previous high-water mark for this time, set in 2022.
Rice prices in Asia soaring… Rice prices in Asia surged the most in more than two years on concerns about the supply outlook after the cost of fuel and fertilizer jumped due to the Iran war, prompting some Thai farmers to leave their crop in the ground, Bloomberg reports. Thai white rice 5% broken, an Asian benchmark, jumped 10% to $423 a ton in the week ended April 8, the biggest gain since August 2023. While it’s an early sign that rising input costs are starting to impact the market, prices have been on a prolonged downtrend and were recently near the lowest in over a decade. Some farmers in Thailand have suspended rice cultivation because their profits simply aren’t enough to cover the ballooning costs, said Oscar Tjakra, a senior commodities analyst at Rabobank in Singapore. The challenging situation has been compounded by a long dry season, which has significantly reduced yields and tightened supplies of the current crop, he added.
Bessent says U.S. tariff rates could be restored by July… U.S. tariffs may be restored by July to the levels in place before the Supreme Court struck down many of his levies, Treasury Secretary Scott Bessent, according to Bloomberg. “We had a setback at the Supreme Court in terms of the tariff policy, but we will be implementing or conducting Section 301 studies, so the tariffs could be back in place at the previous level by beginning of July,” Bessent said Tuesday at a Wall Street Journal event in Washington. The Treasury secretary said because the Section 301 tariff authority has already been tested in the courts, business leaders are able to start planning and making decisions around capital expenditures. Trump is seeking to restore his tariff wall using different authorities after the high court ruled that his use of emergency powers to impose those earlier duties was unconstitutional.
Hedge funds turning bearish on the greenback… Hedge funds are increasingly downbeat on the U.S. dollar, Bloomberg reports, as the prospect of renewed U.S.-Iran talks and a possible peace deal have seen the greenback unwind almost all its war-driven strength. The dollar’s turnaround has been swift, with Bloomberg’s dollar index dropping 1.9% in April after jumping 2.4% in March, as the U.S. and Iran started to discuss a resolution to the conflict. “The path to a weaker dollar is widening, with analysts expecting medium-term dollar weakness to be more concentrated versus major peers, such as the euro, yen, and Swiss franc,” said the report. Meantime, the elevated dollar signals long-term correction risks, according to Harvard University professor Kenneth Rogoff. “The dollar is probably at least still 20% overvalued,” he said. “Every previous episode where the dollar — or frankly any major currency — has been this overvalued, it tends to come down over, say, a five- or six-year period,” he said.
Malaysian palm oil futures weaker… Malaysian palm oil futures remained below MYR 4,500 per MT, extending recent losses and hovering near a five-week low. Prices were pressured by a stronger ringgit and weakness in rival edible oils on the Dalian market. Lower crude oil prices added further downside, as prospects of renewed U.S.-Iran talks raised expectations of improved supply, dampening biodiesel demand. Caution persisted ahead of cargo surveyors’ export estimates for March 1–15, due later today, after soft shipment data in the first ten days of the month pointed to weak near-term demand. Still, losses were capped by expectations that top buyer India may step up purchases ahead of seasonal demand, following a 19% drop to a three-month low in March. Additional support also came from Malaysia’s inventories, which declined for a third straight month to a seven-month low in March. Meanwhile, Kuala Lumpur reportedly pledged to expand biodiesel usage to ease fuel supply strains amid the Middle East crisis.
Live cattle futures notch a record high… June live cattle on Tuesday rose $2.90 to $251.425 and hit a contract and record high. May feeder cattle gained $2.025 to $374.85 and also hit a contract high. The cattle futures markets bulls are keeping their foot on the gas amid technical buying interest and solid cash cattle and beef market fundamentals. Improved risk appetite in the general marketplace so far this week also favored the cattle market bulls. USDA at midday Tuesday reported light cash cattle trading so far this week at an average of $247.93. Last week’s average cash trade was $248.38. That’s up $3.42 from the prior week’s average of $244.96. World Weather Inc. said that in the Northern Plains, temperatures will be dropping well below average Friday into Sunday with some snow and windy conditions. This dramatic change in weather conditions after recent unusual warmth will likely cause livestock stress again.
Lean hog futures trending down, hit three-month low… June lean hog futures on Tuesday fell $0.675 to $102.45 and hit a more-than-three-month low. The hog futures market saw mild technical selling pressure amid a price downtrend in place on the daily bar chart. The latest CME lean hog index is down 1 cent at $90.27. Today’s projected cash index price is up 6 cents at $90.33. The national direct five-day rolling average cash hog price quote Tuesday was $69.80.